Wage Deals Up Despite Low Inflation

(Press Association) – PAY RISES averaged 2% in recent months, suggesting wage deals were holding up despite low inflation, according to a new report.

A study of 74 agreements by the Labour Research Department (LRD) found that average settlements in the quarter to August had not changed since April.

One in five of the deals involved a pay freeze, showing that claims of an economic recovery were not breaking through into pay settlements, said the report.

Other surveys have reported that pay rises were averaging just 1%.

Lewis Emery, of LRD, said: ‘As in previous months this year, the three month figures to August show that pay is generally continuing to hold up despite inflation figures and despite the recession.

‘When the trend is downwards, long-term pay deals are still showing that they can deliver a good result both in the public and private sectors, and the consistent increases they provide are helping to give stability to the economy and to financial expectations for both employers and employees.’

TUC general secretary Brendan Barber commented: ‘This is undoubtedly a tough time for pay negotiations, but these figures show that pay freezes are the exception not the norm.

‘Successful organisations and organisations facing skills shortages still need to offer real pay increases and it’s to the credit of many unions and employers that they are sticking to the long-term deals they negotiated when things looked different.’